My tenant has just
informed me he/she is leaving and asked for a refund on rent paid in
advance.What notice does the
tenant have to give me and can I hold onto rent paid in advance?

As
usual the answer to this question depends firstly upon the type of tenancy
that you have given to your tenant.

If
your tenant has been granted an Assured Shorthold Tenancy, usually either
for an initial term of six or twelve months and your tenant is still
within this initial Shorthold period, then strictly speaking your tenant
can only determine the tenancy if the Agreement contains a break clause
and only then if the terms of the break clause are followed.

Thus
if a tenant wishes to leave during the initial Shorthold period there is
no real notice period and the tenant is liable for rent for the Shorthold
term (6 or 12 months).Obviously,
this doesn’t usually happen in practice.More often the reasonable landlord will make informal arrangements
with the tenant, maybe along the lines that the landlord will use their
best endeavours and advertise for a replacement and the tenant will only
be responsible for tent up to the finding of a replacement tenant.Alternatively, it may be agreed that the landlord keeps any rent
deposit previously paid as compensation.

The
situation is however, quite different if the tenant has just an Assured
Tenancy or has become a Period Assured Tenant because a Shorthold Tenancy
has now turned into a Periodic Tenancy at the expiry of the Shorthold
element.Here a tenant can
determine a tenancy by service of a Notice to Quit.The Notice to Quit must be in writing and must give a least 28 days
notice.There is no
requirement for any other prescribed information.

Therefore,
other than the return of a deposit (which is obviously returned after a
satisfactory inspection of the property on termination), if your tenant
pays rent one month in advance, you do not have to return any pre-paid
rent to your tenant.

An
interesting point develops here.A
landlord has more control over notice periods if the tenant is an Assured
Shorthold tenant.Thus, when
the initial Shorthold element is close to expiry you may wish to invite
your tenant to enter into a further Shorthold Tenancy Agreement.

Article
First Published: 15 January 2004

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